Housing is the largest expense for the average American consumer. The more people have to spend on housing, the less money they have available to invest, save, or spend in other categories. But does owning your home instead of renting affect how much you have in your savings account? And is it the best financial decision for you right now?
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The Federal Reserve’s most recent Survey of Consumer Finances suggests the answer is yes. Here’s how the average renter’s savings compares to those of the average homeowner.
The Survey of Consumer Finances data goes back to 1989, and since then, homeowners have always had more in savings than renters, on average. However, the gap between homeowners’ and renters’ savings has been growing.
For example, in 1995, on average, homeowners had around twice as much saved as renters. Now, homeowners have five times more in savings than the average renter.
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The most recent national data estimates that the average renter had $16,930 in savings. That includes all money in savings, checking, emergency funds and money market accounts. Though rent amounts will vary greatly depending on your location and size of your space, the current national average rent in the United States ranges from about $1,625 to $2,100 per month, which is a 1.1% increase compared to last year.
By comparison, the average homeowner had $85,430 in savings, which is nearly $70,000 more than the average renter. That’s a big difference when it comes to what you’re able to allocate for emergency savings and retirement accounts. However, buying a home is not an option for the average savings, as the national average house price in the U.S. for Q1 2025 is $503,800, whereas the median sales price in the same period was $416,900,
Perhaps counterintuitively, renting is often less expensive than owning a home. In the largest 50 metropolitan areas in the U.S., the median cost of renting is currently $1,398. This figure has been trending modestly downward since the second half of 2022, and represents the middle ground, with half of rents being higher and half lower, so it is quite subject to fluctuations.
The median home price is currently $416,900, and the average mortgage rate is 6.97%, per the Fed. With a 20% down payment and a 30-year fixed-rate mortgage, your monthly mortgage payment likely ranges from $2,167 to $2,715, excluding taxes and insurance.
High interest rates are likely driving most of the higher costs of homeownership. If mortgage rates go down as expected, monthly mortgage payments will decrease. However, despite the higher costs, homeowners still save more than renters.
So why is there such a big difference between how much renters save and how much homeowners do? One explanation is that rental prices continually increase while the cost of owning a home stays relatively stable after the purchase.
Say you buy a new home with a 30-year fixed-rate mortgage. Your monthly housing costs will be stable for the 30 years of the loan. After you’ve paid off your mortgage, you’ll have to pay only taxes, insurance and maintenance.
Unexpected maintenance costs, such as roof damage or broken pipes, can eat into a homeowner’s savings, whereas renters don’t have to pay for these costs out of pocket since they’re the landlord’s responsibility.
However, renters do have to cover rising rental rates nearly every year. Since 2019, rent prices have increased by around 19% nationwide. Rising rent prices can take up larger and larger chunks of renters’ budgets.
As their housing costs increase, they have less money to put toward savings and other financial goals. By comparison, homeowners have more of their income to put into savings after paying off their mortgages.
The bottom line is that if you’re a renter hoping to put more in your bank account, you should try these money-saving strategies:
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Pay off debt with high interest rates: High-interest debt can prevent you from building your savings. Start by paying off any loans with high interest rates, like credit card debt.
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Live with a roommate: Splitting your housing costs with a roommate will give you extra money each month to put toward savings.
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Renegotiate with your landlord: When your lease is up and it’s time to sign a new one, negotiate your monthly payment. If your landlord charges more than the market rate, it may be worth moving to a more affordable home.
Finally, remember to put at least some of your savings into a high-yield savings account so you can grow your money.
Caitlyn Moorhead contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: How Much the Average Homeowner Has in Savings vs. the Average Renter